Trustee objection question

[Monicak1971]

The trustee has 4 objections:

1. The plan does not provide the minimum distribution of disposable income to unsecured creditors as required by Form 22C line 59.

2. The plan fails to provide for the secured claim of AAFES/Mil Star/Exchange.

What do both of these mean?

Thanks in advance.

Monica

[keepmine]

Unsecured creditors must receive as much in a Chapter 13 as they'd have gotten in a Chapter 7.
Looks like you also have a creditor who is secured and your plan doesn't provide for a payment.
What does your lawyer say?

[justbroke]

1. The plan does not provide the minimum distribution of disposable income to unsecured creditors as required by Form 22C line 59.

Line 59 is the DMI calculation. Many Trustee will use either B22C line 59 or Schedule I/J or both to find the proper DMI.

2. The plan fails to provide for the secured claim of AAFES/Mil Star/Exchange.

This must be some sort of mortgage or other secured debt. If you are not surrendering the property, it must be "provided" for in the plan.

As suggested, go back to your attorney. If you are pro se, then you will need to re-evaluate your Chapter 13 Plan and determine whether you will make the changes, or argue your plan before the court.

(As also suggested, you could have what they call "Chapter 7 Liquidation Test" issues. That means that you are not proposing the minimum required to unsecured creditors. This is different than the B22C Line 59 DMI calculation.)

[ValleYum]

AAFES/MilStar/Exch is a credit card entry. The Military Star Card is an “all services” card issued by the Army and Air Force Exchange Services (AAFES). It is accepted at all service exchanges (AAFES/NEX/MCX/CGX) and for catalog and online purchases.

MonicaK? Did you or your spouse buy uniforms and put them on your MilStar card (Military Star card)? Or buy furniture or electronics on one of the account's special payment plans (retail contract)? Those items are considered secured according to the retail agreement you agreed to when you opened the account. So some items may be secured and some could *possibly* not be secured - perhaps you can check the proof of claim form they filed.

They are tough people to deal with. I know one person whose ex-spouse had charged a bunch of stuff (it was in the divorce decree that she was responsible) and she eventually failed to pay them. They garnished this guy's retirement pay until the debt was settled - he was a government contractor and was too worried about losing his super high security clearance to file BK. They can offset tax returns too as an entity of the DoD.

Chase has a separate rewards MasterCard product called the Military Star Rewards MasterCard - but it will put certain installment charges onto the regular private label MilStar card I spoke of above and show the 2 credit lines on your monthly statement.

[Monicak1971]

We had our 341 meeting today and talked to our attorney. Two of the AAFES cards are showing as secured. The attorney is working with the trustee and trying to resolve this since they are traditional credit cards. The attorney said this is an ongoing issue, but case law is on our side.

The trustee is questioning the difference in our income on 22c line 59 and what disposable income is on our budget worksheet. The difference is a change in pay for my husband. The 6 months before we filed included income for him from when he was assigned overseas. The attorney said since we have documentation that shows the decrease is permanent we should be fine.

The trustee also questioned our vehicle expenses. I drive an average of 620 miles per month for work (reimbursed and included in my income). 1009 miles commuting to and from work with day care drop off and my husband commutes 308 per month. We are asking for $853 per month for gas and vehicle maintenance for the two cars. Has anyone else had this high of an amount approved?

The attorney said it will be another 2 months or so before we have a final number. This is so scary. We just want to do everything right.

Thank you everyone!

Monica

[justbroke]

It reads as though you are in very capable hands (with your attorney). There are people that have used $800/month for fuel and maintenance! You think that's bad, my non-mortgage expense (heat, A/C, water, electric) was over $700/month on my Means Test. No one questioned it. It will come down to documentation!

Try to relax over the next few months. It's the Trustee's job to poke at your expenses to get you to pay more. It's your attorney's job to make sure you have the right expenses and not let the Trustee go crazy! It reads to me that both are doing their job. I don't see any judge questioning your reimbursed mileage (included in your income) offset by your actual expense! In fact, the reimbursement ($0.52/mile) is probably making your income slightly higher than what your fuel and maintenance costs.

[momofthree]

I have to admit that your vehicle expenses do seem rather high for the mileage you're driving. My dh commutes 120 miles per DAY (about 2700 miles per month) and my average driving is about 400-500 miles per month, so we easily drive twice as much as you and don't spend nearly that amount on gas. We're also in CA, where gas prices tend to be higher than the rest of the country. Do you have receipts to back up the costs that you're claiming? We put $475/mo on our schedule J and it wasn't questioned, but again, we drive quite a bit more miles than you and had receipts to back up the expense. Maybe you're driving gas guzzlers or old vehicles that require a lot of repairs/maintenance, and if you have the receipts, it should be allowable.

Or, maybe you meant to say you drive 620 miles per week? That would make more sense.

[Monicak1971]

We do have receipts for the gas and based the amount on what the federal government states it costs per mile to fuel and maintain a vehicle (55.5 cents per mile). My SUV gets 20 mpg, but requires oil changes ever 45 to 60 days. My husband's car gets 26 mpg, but is no longer under warranty and the last repair was $800. My SUV will need new brakes and some other work this year and the total bill is $987.32. Both vehicles will need new tires during the life of the plan and that is another $1800 total.

Monica

[159515951]

A couple of thoughts about vehicle maintenance that may help:

1. If you're getting oil changes every 60 days at 1,000 miles/month, you're getting your oil changed too often. Every 3k miles is too much in most situations. My SUV goes 6k miles between oil changes per the owner's manual.

2. If you're having maintenance and repairs done at the dealer, you will save hundreds (thousands over the course of your 13) by finding a good privately-owned shop instead. Brakes should be no more than $300-350 for front end, and that's with new rotors and expensive OEM parts.

[momofthree]

Better yet, if you have a local shop that does lifetime brakes (Meineke offers them if you have one near you), then you only pay labor for each replacement (around $100). They really pay off when you own your vehicles a long time.

[Monicak1971]

I will check out Meineke; that is a great idea. I drive 1630 miles per month for work plus my commute. I average another 700 miles per month in errands, school events, family activites, etc. Since I drive in town for 95% and live in Colorado, my owner's manual says 3, 000 miles or my warranty could be voided.

Monica